On October 2nd, GWIKs were joined by experts David von Hippel, Nautilus Institute Senior Associate, Dan Wertz Program Manager at the National Committee on North Korea (NCNK), and Celeste Arrington Korea Foundation Associate Professor of Political Science and International Affairs at George Washington University to discuss the significance of oil supply and demand in North Korea’s economy and infrastructure. In analyzing this key sector that makes up a fundamental part of North Korea’s energy consumption, we also gain a glimpse of how North Korea is able to cope with a multitude of sanctions imposed by the United Nations in addition to understanding the link between North Korea’s energy insecurity and its nuclear weapons program.
Von Hippel, our guest speaker for the presentation, begins by outlining the history of North Korea’s oil supply sector and how it has managed to maintain its energy consumption despite multilateral challenges. From the 1990’s North Korea obtained a majority of its oil supply from China and the USSR, going as far as to use up to three times as much energy consumption than China during that period up until the fall of the Soviet Union. That collapse of the USSR saw North Korea losing a large sector of its oil supply and forcing it to engage with the international market, where oil prices were far more expensive. This results in a stronger dependence on China for its oil-importing, which by the 2000s, would stabilize North Korea to a degree. However, the United Nations has recently, since 2014, imposed economic sanctions on North Korea, limiting the number of imports and exports of resources, which has in turned, pivoted the northern part of the peninsula towards “off the book” or illegal smuggling of oil from other countries, including China who no longer reports imports or exports regarding North Korea to the security council. Often in exchange for oil, North Korea provides external sources of oil import with money, labor, or weapons.
It’s worth noting that while North Korea does maintain a domestic source of oil supply, the production of its own oil is neglected in favor of importation, likely due to economic costs, aging infrastructure, and past failures to work collaboratively with outside assistance to amplify production. The DPRK currently has two known major oil refineries at their disposal: one located in the northeast in Pong Hwal, that is connected to the pipeline China uses to send crude oil to North Korea, and one located in the northeast in Sonbong, which is an older and smaller plant but has the potential for expansion in the future. Another notable location of interest is Nampo, the port experts claim to be the access point for many of North Korea’s “off the book” oil imports. Nampo also maintains a nearby refinery that is specifically producing oil for the country’s military purposes.
Sanctions and negotiations tied to North Korea have often revolved around its nuclear program, as North Korea is heavily dependent on energy conservation not only for its operations and way of life but also, as expert, Dan Wertz mentions, “energy use serves as a key emblem to North Korea’s self-presentation.” If one were to take note of North Korea’s coat of arms, they would immediately see the hydroelectrical plant front and center that is located near the Chinese border, close to the pipeline mentioned previously. In negotiating the de-escalation of its nuclear weapon program, North Korea generally bargains for increases and upgrades to its energy system. It should also be noted that North Korea is not incredibly behind, as the northern part of the peninsula has made bounds not only in the use of nuclear energy but also in cybersecurity and hacking. It’s electrical infrastructure, however, is lacking, and aging, which has forced the many North Korean consumers to take matters into their own hands. Much of North Korea’s energy grid is regulated by political needs rather than on a market basis, leaving Pyongyang and military innovation the predominant source of energy consumption. Even still, restrictions and limitations on how energy can be used even by North Korea’s high class, has pushed much of its citizens towards alternative ways of energy consumption, such as the use of solar panels, bribing military officials, or perhaps the most concerning: biomass production. This includes utilizing wood, coal, and natural sources as fuel, but also comes at the cost of heavy deforestation and soil degradation, another challenge posed to North Koreans at the bottom who are already coping with stack hardships.
All of this has led to an increasing amount of illegal smuggling which continues to provide North Korea the energy it needs, to mitigate the impact of the UN’s sanctions and allow North Korea to continue expanding its nuclear weapon program. In considering solutions to this issue, Von Hippel suggested that a multi-faceted, coordinated approach on all levels was required, and that particularly, the United States should temper its expectations and step by step process of providing resources to accommodate North Korea’s energy insecurity in exchange for denuclearization. Ultimately, the two issues are coupled together, and without a continuous energy solution there cannot be a sufficient and continuous nuclear weapons solution.
